China To Invest In Malaysia

KUALA LUMPUR: Chinese companies have begun to venture outwards by capitalising on the global interest in their country.“We choose to invest in companies where the growth of the investee comes from China, our approach is to enter as a friendly strategic investor and aim for long-term growth by leveraging on our current network,” Liang Xinjun, vice-chairman and CEO of Fosun International Ltd, told The Edge Financial Daily on the sidelines of the conference yesterday.Fosun is a state-owned business with a presence in the steel, property, retailing, pharmaceutical and financial services sectors.

Liang said the main challenges for Chinese companies venturing out are the cultural difference, integrating with the new shareholder and evaluating possible acquisitions to complement their businesses.

He added that interest in China stemmed from the growth of its domestic consumer market. The pharmaceuticals and luxury goods industries are still in their nascent stages and they have vast growth potential.

He said Fosun has no direct interest in Southeast Asia and it will give priority to Malaysia and Singapore if it invests in the region.

Liang says Fosun may choose to relocate to Malaysia.

“We have a manufacturing business and are actively looking for ways to increase capacity. We may choose to relocate here as Malaysia’s geographical location is quite favourable. It is close to the South Asian market, labour costs are quite competitive relative to the east coast of China,” said Liang.

He added that an expansion into Malaysia will likely involve the property or pharmaceutical sector.

“We may build products for the regional rather than the local market, such as residential properties for Chinese residents here,” he said.

Sany Heavy Industry Co Ltd president and CEO Xiang Wenbo, who was also present at the conference, said foreign companies should look for a good Chinese partner to enter the Chinese market.

“We want to cooperate with them on opening up the market situation in China. I think it would be a win-win situation for both,” said Xiang.

For Chinese companies, expansion out of China is currently focused on the mining and minerals industry.
Source – The Edge Financial Daily